Back up from Down Under

Chris Hancock, deputy executive chairman of Robert Oatley Vineyards, says: “The Australian wine industry is in an exciting period of transition. While it had suffered a downturn in perception and reputation, there are significant signs of a fight back on the quality front.

"Key players around the world are recognising our strengths of quality and diversity. Australia is placing much more emphasis on these aspects in place of being a volume supplier to the world. At Robert Oatley Vineyards we have always considered quality as paramount and believe that Australian wine is deservedly standing proud next to the finest wines in the world.”

Well said that man, although not everyone, particularly in the Old World, might agree.

Wine Australia CEO Andreas Clark told Drinks International at ADT that Australian wine shipped in bulk makes up 56% of total volume, with the ratio for exports to the UK being 84%. He suggested that may shift back as the weakening Australian dollar due to the faltering Chinese economy means bottling/packaging may switch back to Australia.

Kingsland Drinks is the UK’s leading packer and its buyer for Australian wine, Paul Braydon, tells DI: “A considerable shift in the rate of exchange would obviously reduce the cost benefit of bulk shipping and UK bottling. Kingsland Drinks has been bulk shipping from Australia for many years.  When I started at Kingsland in 2010, the ROX (rate of exchange) against the US dollar was $1.70 and it was still cost effective then, and we’re at $2.04 now. There are also huge environmental and logistical benefits with UK bottling, so it’s not purely down to a dollars-and-cents argument.”

Switching to Australia worldwide, asked why China has posted such a significant growth, Clark says it was down purely to the Chinese discovering wine and starting the journey. He says: “The room (at a recent tasting in China) was full of young people, keen to know about wine. It is all part of the westernisation of the Chinese.

“Australia has a good reputation as a country in China. The Chinese see it as clean and green with fresh fruit and vegetables, dairy and seafood. We are seen as credible and reliable.”

He says Treasury Wine Estates, with its Penfolds brand and its iconic Grange, had posted significant growth. With the absence of any market research information, Clark believes the challenge is to find out where the wine is going and who is drinking it.

He describes the US market as “like geurilla warfare”, with Australia up against the traditional European wine-producing countries which have “big budgets with subsidies from Brussels”.

Guillaume Deglise, CEO of Vinexpo, commenting on IWSR research commissioned by Vinexpo to promote its forthcoming Hong Kong and Tokyo trade exhibitions, says: “There is a lot of potential for Australian wine in China. Before it was France only for premium products, but Penfolds is everywhere (in China). But people (in China) are looking for new brands from new regions. There is definitely potential.” Earlier Deglise had commented that, with the clampdown on extravagant gift giving and consumption, an importer in Beijing had commented to him that Bordeaux wines were now ‘passé’ among Chinese.


Nevertheless, for the US and UK in particular, Wine Australia has what Clark describes as a “suite of activities”, such as tastings, masterclasses and food and wine matching, to raise awareness and emphase single varietal wines and regionality.